....Barclays calls SDRL's dividend "rock solid," encouraged by the $0.03/share raise to $0.98 as it reflects the company's operational improvements, solid order backlog and support received from financing markets.
Barclay’s James West and team call Seadrill’s dividend “rock solid.” They explain:
[Seadrill] highlighted reduced activity levels due to lower capex from major oil companies, particularly in exploration and high cost areas of production. The company stated that as budgets are re-allocated, the spending slow down is pushing demand for offshore drilling assets into 2015-2016, and [Seadrill] believes the trend will lower oil production in the coming years. Additionally, the company sees challenges ahead for 4th and 5th generation rigs as new, post-Macondo requirements from oil companies have significantly limited the use of older equipment. [Seadrill] has also seen a decline in the overall number of fixtures, lead times and contract duration, and expects sublets to add to near-term supply.
Despite the negative outlook, the company increased its quarterly cash dividend by $0.03 to $0.98/share and highlighted this new dividend level as a floor for the coming years. We are encouraged by the increase as it reflects the [Seadrill's] operational improvements, solid order backlog, and support received from financing markets.
doesn't anyone worry they don't make enough to pay dividend let alone buy all these ships. They made 48 cents a share and paid out 98 cent dividend. Sooner or later there will be a cut or a dilution by way of selling more shares. I liked the dividend as long as it lasted and am glad I got out. I cannot get back in because I know one of the hammers is coming down. Cant see dividend be cut for 2 qtrs. I think they will issue shares because they must do something. They can pay off no debt and only part of dividend each qtr. Risky Risky bet. I got in Esv instead as they pay 75 cents a share and make 1.30 a share so they can buy ships and pay off debt. I liked do for a long time but have been out for a while as there earnings were dropping like a rock. Management kept giving special dividend even last qtr which is shoching.